Dear Monty: Rebuilding a damaged historic 18th century home?

Tuesday

Reader question: What happens if a tree falls on my neighbor's 18th century home and destroys it? Who determines the cost of rebuilding an "antique" like that?

Monty’s answer: Let us assume the tree in question is on your property. If the tree were alive and healthy and fell onto your neighbors home the neighbor's insurance company would have to pay. The rule of thumb is the insurance on the property damaged pays for the damage if the tree was healthy. This article is typical about a fallen tree http://bit.ly/2YzKlLp.

If the tree were dead or dying, then you would be liable because you were negligent by allowing the tree under your control to stand. You could have prevented it. Your insurance company would pay, but how much and for what depends on your policy. Some insurance policies depreciate the structure.

The neighbor's property insurance will cover the loss if a healthy tree on their property falls on their house. If the tree was dead or unhealthy, the neighbors may have an issue collecting as they could have removed the dying tree.

The historic home

A few insurance companies will insure a historic home, but most companies will not due to the cost and complexity to fix them. If the homeowner does not specify "historic," it will be treated like an ordinary house, which may result in inadequate coverage. The few insurance companies that write policies include replacement cost to cover the cost of the intricate details in historic properties. These policies are more costly than a typical homeowners policy. Here is a Wall Street Journal article at https://on.wsj.com/2I1oFBY that demonstrates why insurers are wary.

Historical policies also may contain particular requirements depending on the home and property. They may ask for inspections, repairs, painting and more. If there is a mortgage on the property, the lender may have provisions to be involved and require inspections at certain stages of the repairs. There may be dollar limits on particular items in the home.

Check with your insurance agent

If trees on your lot could reach that historic home consider speaking with both your insurance agent and an arborist. If you own a historic home on a treed lot, your coverage may not be appropriate if you do not recall the particulars of your policy.

Richard Montgomery is the author of "House Money - An Insider’s Secrets to Saving Thousands When You Buy or Sell a Home." He advocates industry reform and offers readers unbiased real estate advice. Follow him on Twitter at @dearmonty.